World Index: Breaking Out Or Double Topping?

Posted by on January 26, 2017 1:48 pm
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Bloomberg had an interesting chart for us this morning (above)

According to them, global stocks rally is gathering pace and looking for a breakout.

Record highs in the world’s biggest equity indexes is fueling optimism that renewed growth in the U.S. will filter through into other major global economies, creating demand for commodities exports and driving investors out of fixed-income assets and gold. Economic growth indicators are hovering near the upper limits of historical ranges, according to Deutsche Bank AG.

That’s one way to look at the subject matter.

And another?

The chart above is putting in an important long-term double top. When completed, global indices will turn around and speed lower.

Over the weekend I had a long discussion about just that with my partner in crime Matt Demeter. He follows most of the world indices in great detail and recently most of them (Nikkei, DAX, FTSE, euro stoxx 50, etc….) are flashing the exact same sign/pattern.

This is critical. If his work is correct, worldwide indices are about to make a major move. Will they breakout as Bloomberg suggests or will they breakdown?

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